Question: Here is a link to Target's 2017 Annual Report https://corporate.target.com/_media/TargetCorp/annualreports/2017/pdfs/2017-Annual-Report.pdf?ext=.pdf Consider the concept of days sales in Accounts Receivable (AR) and Inventory.It is easier, particularly

Here is a link to Target's 2017 Annual Report

https://corporate.target.com/_media/TargetCorp/annualreports/2017/pdfs/2017-Annual-Report.pdf?ext=.pdf

Consider the concept of days sales in Accounts Receivable (AR) and Inventory.It is easier, particularly with the limited information presented, to use the ending balance of inventory or AR and not the average balance. This should allow you to compare this year to last year.

The formula:Sales / 365 = Sales Per day

Divide Accounts Receivable ending balance by sales per day. The answer: day's sales in AR.

For Inventory, Cost of Goods Sold / 365 = sales per day (at our cost).

Divide Inventory ending balance by sales per day. This answer:day's sales in Inventory

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